U.S. Dollar Rises As Most Asian Stock Markets Traded Lower

7/3/2017 2:27 AM ET

The U.S. dollar strengthened against other major currencies in the Asian session on Monday, as Asian stock markets are mostly lower in cautious trades following the lackluster cues from Wall Street and as investors digested a raft of regional economic data, including the Bank of Japan's quarterly Tankan survey and China Caixin June manufacturing PMI data.

Data from IHS Markit showed that China's manufacturing activity recovered in June with firms reporting slightly stronger increases in production and new orders. The Caixin Purchasing Managers' Index rose to 50.4 in June from 49.6 in May. The reading was expected to fall to 49.8.

Data from the Bank of Japan showed in its quarterly Tankan business survey that an index monitoring business sentiment in Japan surged in the second quarter of 2017. The large manufacturers' index came in with a score of +17, beating expectations for +15 and up from +12 in the previous quarter.

The outlook came in at +15, also topping expectations for +14 and up from +11 in the three months prior.

Last Friday, the U.S. dollar showed mixed trading against its major rivals. While the greenback fell against the pound, the Swiss franc and the yen, it held steady against the euro.

In the Asian trading, the U.S. dollar rose to a 5-day high of 0.9599 against the Swiss franc, from Friday's closing value of 0.9583. The greenback may test resistance around the 0.98 region.

Against the euro, the pound and the yen, the greenback advanced to 1.1404, 1.2995 and 112.57 from last week's closing quotes of 1.1417, 1.3026 and 112.38, respectively. If the greenback extends its uptrend, it is likely to find resistance around 1.11 against the euro, 1.27 against the pound and 114.00 against the yen.

Against the Australian, the New Zealand and the Canadian dollars, the greenback edged up to 0.7667, 0.7314 and 1.2993 from last week's closing quotes of 0.7682, 0.7331 and 1.2962, respectively. The greenback is likely to find resistance around 0.74 against the aussie, 0.71 against the kiwi and 1.33 against the loonie.

Looking ahead, Swiss retail sales data for May, manufacturing PMI reports from major European economies for June and Eurozone unemployment rate for May are due to be released later in the day.

At 4:30 am ET, St Louis Fed President James Bullard and Bank of England Chief Economist Andy Haldane are expected to deliver closing remarks at the Bank of England's research conference, in London.

In the New York session, U.S. Markit's manufacturing PMI for June and U.S. construction spending for May are slated for release later in the day.